Oman—the Arabian Gulf’s largest oil producer outside of the OPEC club—has a reputation for being generous to its public sector employees, giving them lavish benefits, relaxed working hours, and pay packages. However, the country now finds itself faced with the need to address its restrictive labor policies and reform the benefits it bestows upon public sector employees if it has to attract more participation from the private sector. Employing young Omanis to harness the most out of its labor force to stay ahead of the energy industry will be a priority, the Omani Sultanate's Oil and Gas minister Dr. Mohammed Al Rumhy was recently quoted as saying the Gulf Intelligence Special Research Report focusing on Oman.

The government has made several efforts to strengthen its private sector, which constitutes about 60% of the overall labor market in the Sultanate of Oman. However, the impact of the private sector in Oman has not been very impressive on the overall national employment figures.

The country’s Ministry of National Economy said that only a third of all employed Omanis are currently reported to be working in the private sector. This means that the majority of Omanis are employed in the public sector – that’s because the benefits in this sector are extremely attractive with workers enjoying other luxuries such as less working hours and a comfortable work environment. On the contrary, the private sector calls for higher working hours with job security being a concern if the overall economic conditions are choppy. However, the government will have to go to the root of the problem and address restrictive regulations that exist in the private sector, such as minimum wage slabs. This has discouraged a number of private players from opting for Omani nationals for employment.

This fact was reiterated by the World Economic Forum’s Global Competitiveness Report for 2014-15, which stated that the restrict labor mandates are proving to be the greatest hindrance for those wanting to do business in the Sultanate of Oman.